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Is almost $12,000 in loan costs on a FHA mortgage refi. excessive?

by ssbentley6092 from Matawan, New Jersey. Apr 25th 2017 Reply


William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,007 contributions

More info needed.. and it's hard to advise without seeing a breakdown of the fees.. however on the surface, it does seem really high.. keep in mind that FHA charges 1.75% Upfront on all loans.. so if you have a $250K loan, then that in it self is nearly $4400. FHA does allow this fee to be financed, so it not an out of pocket expense, but you should factor that in when determining whether or not the refi is worth doing.. But in general, the typical refinance costs for FHA range from $2500 to $4000, but when you add the FHA upfront fee, then your looking at $6900 to $8800.. There's also lender rebates available.. this is when the lender raises the rate slightly, but gives you a credit towards your closing costs.. but again, without seeing your "Loan Estimate" (LE).. it's hard to advise.. If you want to send it to me, i'd be happy to review it and advise you.. understand that I'm not licensed in NJ.. so I could not help you if you decided to move your loan, but at least I can give you some insight as to what the fee's are. I'm a preferred Lender with Arizona and California being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Apr 25th 2017
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John Burke (jburke)
#31 ranked lender in Texas - 187 contributions

Hi SSbently6092,It really depends. On the surface, $12,000 sounds like a lot but we also have no idea how much your property taxes & home owners insurance are or what your loan amount it is. Also if you're doing an FHA streamline refi your upfront FHA premium is .5% of the loan amount but if you're refinancing some other type of loan into an FHA loan or you're doing a cash-out refi the upfront premium is 1.75%. Back to the property taxes. If your home is around $500,000 the property taxes are almost $10,000 per year so depending on when taxes are due the new loan may need to escrow anywhere from 3 to 9+ months. That would add anywhere from $2,500 to $7,500 to your closing costs. The good news for you is you will get a refund from your current escrow account once your current loan is paid off. | Please feel free to contact me for more information or help. | John Burke | Senior Mortgage Banker | Great Plains National Bank http://www.valoansdoneright.com | (877)228-9069 | Lending in ALL 50 states

Apr 26th 2017
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